Int'l Tax News

HM Revenue & Customs’ approach to research and development tax relief inquiries is deterring genuine claims and risks undermining the U.K. government’s policy aim of encouraging R&D, the Chartered Institute of Taxation said.

An over-€1 billion tax package will be among the measures in Ireland’s 2024 budget, according to the Finance Department, which also announced plans to increase capital spending with windfall corporate tax receipts.

Martin A. Sullivan examines the causes and possible effects of the post-COVID surge in Ireland’s corporate tax receipts, cautioning that although the increased revenue might be good for the country in the short term, the revenue stream is too volatile to rely on long-term.

With pillar 2 of the global tax plan materializing, it may be time to take another look at some of the base erosion and profit-shifting measures implemented over the years, an OECD official said.

Competent authorities and multinational enterprises should work together to reduce mutual agreement procedure case inventories by focusing on dispute prevention rather than resolution, an OECD official said.

The US Supreme Court will hear a case on whether the government can tax foreign earnings that have not been distributed to US shareholders. The case could have implications for the limits of Congress' taxing powers.

A report from South Centre says African countries need to improve data collection around digital transactions to benefit from the OECD's global tax reallocation plan.

European Parliament members suggest delaying creation of a common tax base for large companies until businesses have adjusted to the global minimum tax rules.

Lawmakers are looking to a new US-China competition bill as a potential vehicle for enacting tax policy, including reviving the research and development tax break and establishing a carbon border adjustment mechanism.

The US Supreme Court will hear a case that could upend wide sections of US tax law, but experts say the justices may ultimately coalesce around a narrower ruling. If the court strikes down the foreign earnings tax, it could jeopardize other taxes tied to multinational arrangements.

The UK Treasury agreed to review and provide progress reports on the global tax agreement and its digital services tax and provide a contingency plan in case the UK DST needs to be extended past 2025.

An OECD official said countries should review and slim down national rules that may no longer be needed now that there is a global minimum tax approach.

The global head of tax at Siemens said that businesses have not had a proper chance to provide their opinions on the global tax deal, which he described as an anti-democratic process..

After consulting on transporting an EU directive implementing global minimum tax rules under pillar 2 of the OECD’s two-pillar global tax reform plan, Germany is ready to take the next step, a German official said.

A European Commission proposal to penalize intermediaries that facilitate tax avoidance and aggressive tax planning aims to target “bad apples,” not law-abiding tax advisers, Dutch member of the European Parliament Paul Tang said.

The pillar 2 proposed global minimum tax could raise taxes on multinationals’ operations in the United States even if the country fails to act on the proposal, and it could reduce the benefit of credits or other domestic tax incentives, the Congressional Research Service said in a June 29 report.

Australia’s amended draft rule denying deductions for intangibles payments linked to low-tax jurisdictions reflects some stakeholder concerns, but its interaction with OECD global minimum tax rules remains to be seen, practitioners said.

A global minimum effective tax rate will likely encourage governments to stop offering tax incentives that reduce a multinational enterprise’s profit and design incentives to cost-effectively stimulate investment, according to an OECD official.

In Moore v. United States, the Supreme Court has decided to take up a constitutional challenge to the validity of the transition tax in the face of 16th Amendment concerns, and the fallout from a taxpayer-favorable decision could be monumental.

The Spanish presidency of the EU Council, which begins in July, will try to get member states to agree on proposals to strengthen the EU list of noncooperative jurisdictions for tax purposes.

Mindy Herzfeld considers how commitments countries have made under bilateral investment treaties might hinder adoption of the pillar 2 global minimum tax.

Nana Ama Sarfo discusses a recent U.N. policy brief outlining ways to improve the international tax system for the benefit of developing countries.

The Kenyan National Assembly has passed a controversial finance bill that will introduce a withholding tax on income of digital content creators and a tax on cryptoassets.

The OECD removed San Marino, Aruba, and Jordan from its harmful tax practices list after they amended their incentive regimes to address concerns raised by the organization.

French President Emmanuel Macron called for global taxation to finance the fight against poverty and climate change. He proposed new taxes on airline tickets, financial transactions, and shipping.

The Senate voted 95 to 2 to approve a tax treaty between the United States and Chile after more than a decade of delay.

Enacting the OECD’s pillar 2 global minimum tax is estimated to result in a decrease of federal tax receipts for the United States over the next ten years, according to a new analysis.

The European Commission has published its withholding tax reform proposal, insisting that it is strictly procedural, as it tries to gain quick approval of the plan, unlike its previous pro-business proposals.

The United Kingdom will maintain its digital services tax until pillar 1 of the two-pillar plan to reform global corporate tax rules is implemented, according to Paul Tang, a Dutch member of the European Parliament.

Reuven S. Avi-Yonah examines the intersection between the UTPR and tax credits recently enacted by the Inflation Reduction Act and the CHIPS Act.

Mindy Herzfeld considers the implications of the Fifth Circuit’s holding in a recent nondelegation doctrine decision for the constitutional validity of the corporate alternative minimum tax.

The United States has proposed extending a digital services tax moratorium under the OECD’s pillar 1 framework, and while some countries are open to the idea, others are keeping their cards close to their chests.

The United Kingdom is seeking public input on draft guidance on the administration, chargeability, and scope of the taxes introduced by the country’s pillar 2 legislation.

Swiss voters overwhelmingly supported a global move to establish a minimum tax on corporate profits, with the world’s largest offshore center feeling the pressure to help crack down on tax avoidance by the biggest international companies.

New Jersey's SB 3737 would enlarge the state's GILTI exclusion from 50% to 95%, in line with neighboring states. The change could cost the state $122.8 million per year, but supporters maintain it would make New Jersey more competitive.

A new tax proposal from House Republicans would allow companies to temporarily disregard stricter standards for taking advantage of the foreign tax credit. GOP lawmakers argue the proposal would shorten US companies' supply chains, boost their competitiveness, and prevent double taxation.

Developing countries want a UN forum to discuss global tax cooperation because they feel the OECD hasn't addressed their concerns. The UN secretary general is working on a report that could lead to the creation of an intergovernmental tax-cooperation body.

The House Ways and Means Committee unanimously approved a bill to approve a trade pact with Taiwan. The bill could lead to a tax agreement between the two countries to eliminate double taxation and promote investment.

The European Court of Justice's advocate general sided with the General Court in its decision to overturn the European Commission's ruling that Amazon received illegal state aid from Luxembourg. The advocate general found that the Commission incorrectly applied the arm's length principle and failed to identify the framework for normal taxation in Luxembourg.

The European Commission recommends that EU countries review their tax systems to encourage social economy enterprises, which prioritize community or environmental causes. The Commission suggests offering tax breaks for donations and retained profits and reducing the tax compliance burden.

The OECD held an information sharing meeting to help developing countries implement the global minimum tax rules. The meeting brought together early movers on the deal to discuss change management and the necessary steps to implement a minimum tax.

ATAD 3 is a pending EU tax rule intended to crack down on the misuse of EU holding companies. The rule will take effect as early as 2024, and companies that are out of compliance could face penalties.

The UK tax office released a draft proposal for how it will implement its version of the global minimum tax framework. The proposal includes details on which groups and entities will be subject to the minimum tax, as well as how the tax will be administered.

Brazil adopted new transfer pricing rules in line with global norms, which will make it more likely that US multinationals operating there will be able to receive foreign tax credits. The rules become mandatory in 2024, but companies can choose to apply them in 2023.

U.S.-based multinational companies will start paying higher taxes in foreign countries next year under a global minimum-tax agreement. The following year, the deal will cause U.S. companies to lose domestic tax breaks. In 2026, U.S. taxes on companies’ foreign income will rise because of long-delayed provisions of the 2017 tax law. Despite U.S. officials negotiating in 2021 for a way to limit corporate tax avoidance, Congress is deadlocked over what to do and this will ignite consequences for American companies.

The Biden administration is setting the stage for large companies to start buying clean-energy tax credits, kick-starting a new market at the core of last year’s climate law.

The inclusive framework on base erosion and profit shifting is staying positive about finalizing a multilateral convention to implement part of the OECD’s two-pillar global tax plan, but challenging discussions remain, the group’s co-chair said.

The Mexican government is offering tax breaks to companies that invest in 10 new development zones in the southeast of the country. The tax breaks include a three-year exemption from corporate income tax with a 50% reduction for an additional three years.

The Treasury Department plans to release additional guidance on transfers of intellectual property into and out of the United States. The guidance will address questions that were not addressed in proposed rules issued in May.

Some EU policymakers believe wealth taxes could provide new sources of revenue, while others argue they would be difficult to implement and enforce. Supporters claim skepticism about wealth taxes is due to shortcomings of the few currently in place and have proposed fixes.